Vaping Leaders Juul Facing Potential Criminal Investigation
E-cigarette giant Juul, the leading e-cig manufacturer in the U.S. is facing criminal charges over growing health concerns surrounding its products.
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Juul has reportedly come under criminal investigation by federal prosecutors in California as the fallout from several deaths in the U.S., potentially caused by the practice of vaping, intensifies.
According to a report in the Wall Street Journal, a probe is in its early stages by the U.S. Attorney’s Office of the Northern District of California. When asked for a comment on the matter, Juul had nothing to say.
Only last week, Food and Drug Administration officials had warned the e-cigarette maker to stop running advertisements which depicted that vaping is safer than smoking regular cigarettes, following an outbreak of lung damage which has left more than 500 people in hospital and up to 9 people dead.
Though Juul is a privately traded company, it has plans for an IPO some time in the near future. Juul’s IPO plans will surely be affected by a large scale criminal investigation and potential banning of its product. A publicly traded company which will feel the strain on its stock price however, is Atria (HEL: ATRAV), one of the worlds largest cigarette manufacturers, who bought 35% of Juul for $12.8 billion last December. Such companies, like alcohol manufacturers, have relied on diversified portfolios such as Juul to keep up with increased public health awareness.
It is not just Juul and its shareholders who are feeling the affects either, as retail giant Walmart (NYSE: WMT) announced last week that it would stop selling e-cigarettes amid growing health concerns. At the start of September, Walmart also announced reductions in its guns and ammunitions products following a string of mass-shootings in the U.S., showing a growing ethical conscience among the Walton family. How this will affect the chains sales remains to be seen, but one would think that the world’s biggest retailer should not be too concerned about one lost market.